Eni CEO says Saipem could be sold in longer term

NEW YORK/MILAN Italy's Eni (ENI.MI) has signaled it could be open to a sale of its oil services subsidiary Saipem (SPMI.MI) after a widening corruption probe in Algeria left mud sticking to the oil major.

"It's certainly not a priority, but we could consider it in the future," Eni Chief Executive Paolo Scaroni said on Monday on the sidelines of a conference.

An investigation into allegations that Saipem paid bribes to secure a series of contracts in Algeria worth $11 billion prompted the resignation in December of Saipem's long-standing chief executive, Pietro Franco Tali.

The probe cost the heads of other Saipem and Eni executives and last Thursday it emerged that Scaroni himself was under investigation.

"We always considered it (Saipem) strategic ... the events we've gone through now lead us to rethink the relationship long term," Scaroni said.

State-controlled Eni, which owns 43 percent of Saipem, awards about 10 percent of its subsidiary's order portfolio, leading some analysts to talk of a potential conflict of interest.

"Saipem is a totally independent company on which we can only exercise moral suasion," Scaroni said on Monday, adding he saw no reason why he needed to resign over the investigation.

SLIMMING DOWN

Eni is in the process of selling down its stake in Italian gas grid operator Snam (SRG.MI) as it divests non-core assets to focus on more profitable upstream business.

The sale has also allowed Eni to take 11 billion euros of Snam debt off its balance sheet.